Clinton Group, Inc. today announced that it has sent a letter to the Board of The Wet Seal, Inc. (Nasdaq: WTSLA) urging the Board to return cash to shareholders and to sell the Company.

In its letter, copied below, Clinton's Senior Portfolio Manager, Joseph DePerio, noted that the termination of the Chief Executive Officer's employment contract was "a good first step." He went on to note "the right next step is for the Company to be sold."

Mr. DePerio continued, "We simply cannot wait for the Board to hire yet another Chief Executive – the next one will be the fourth in five years – to embark on yet another change in strategy with the aim of turning around the Company. That path is simply too uncertain."

The Clinton Group expects that a sale of the Company could bring shareholders $5 to $8 per share, given recent transaction multiples and premiums in the retailing industry. Mr. DePerio noted that in several recent transactions, strategic and private equity buyers have "rescued shareholders from the sort of chronic under-performance shareholders have suffered at Wet Seal," and have provided the exiting public shareholders with a price that rewarded them for "some of the fruits of the anticipated turnaround."

Given the uncertainty associated with remaining independent, Mr. DePerio's letter noted that such a deal would likely garner for shareholders a price that "is meaningfully more than what the Company can do on its own."